Warner Partner Dennis Loughlin discussed supply chain distress in the Crain’s Detroit Business article “Romeo machine shop files for bankruptcy, blames supply chain and labor issues.” Cammand Machining LLC filed Chapter 11 bankruptcy on Tuesday, August 16, citing staffing shortages, inflation and supply chain disruptions largely due to the COVID-19 pandemic.
Loughlin weighed in on the impact of this bankruptcy and whether it’s a signal of more supply chain trouble yet to come: “The landscape has changed over the past nine months – raw material pricing has gone through the roof, labor is still terrible, inflation, gas prices, all of those factors are now really hitting all at once,” Loughlin said. “If it’s bad for the tier ones and tier twos, it’s even worse for the tier threes and tier fours.”
Cammand filed under Subchapter V of Chapter 11 protection, which is a new bankruptcy option that became effective in 2020 and is designed for smaller businesses. Loughlin said that he expects Subchapter V to be used more frequently by smaller suppliers as it’s a significantly less costly and time-consuming alternative to the traditional Chapter 11.
Crain’s subscribers can read the full article here.
Loughlin focuses his practices on both general corporate law and counseling secured and unsecured creditors across the U.S. in all phases of restructuring and insolvency proceedings, creditors’ rights and commercial disputes. His insolvency experience includes traditional bankruptcy work, but also receiverships and out-of-court loan workouts, and particular experience as these relate to Commercial Mortgage-Backed Securities (CMBS). Learn more about his practice here.